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Deus Forex Machina
Macro Morning: Australia dollar down
Rightyo so the Fed didn’t say anything contentious or unexpected and as David has written this morning in his piece on the Jedi Fed “When the Fed tapers now is really immaterial. The possibility of it is all that matters.” Which of course is dead right and what really hit markets overnight. The key phrase from
Macro Morning: No safe harbour here
Over the past month there has been a strong divergence in economic release between the G10 (strong), the BRIC’s (weak) and emerging markets (weak but not as weak as the BRIC’s). This data flow has ignited a capital flow away from emerging markets and back toward developed markets as we saw with the strong rally
Macro Morning: Healing
Data out of Europe overnight continued the recent trend of better than expected performance for the EU and other developed markets. GDP growth for Q2 was a great and very welcome surprise was the pick up in French GDP of +0.3% (-0.1% expected), German GDP (+0.7% v 0.6% expected) and overall EU GDP which was +0.3%
Macro Morning: Yield spike
Bonds rates around the world moved higher, sharply so, overnight on the back of the better than expected data in the US and in Europe. Retail sales in the US looked disappointing on the face of it printing just 0.2% against 0.3% expected but this was largely because auto sales were lower with the core
Macro Morning: Australian dollar strength
The Chinese data changed the whole game plan yesterday with the much better than expected outcomes of +5.1% for exports and +10.9% for exports igniting rallies in the Aussie and the commodity bloc currencies, in copper and other global metals and overnight giving a more positive tone to stock markets. Data in Germany though was pretty poor
Macro Morning: Tapered enthusiasm
Interesting night overnight with more Taper talk in the US, a less dovish than expected Bank of England Governor Mark Carney and a much stronger yen than anyone could really imagine given the challenges of the Japanese economy. In the end it was taper talk which hit the US stock markets which were down a
Macro Morning: Dectaper
A very interesting night on markets and particularly FX markets Friday after the non-farm payrolls missed to the downside printing just 162,000 rather than the 184,000 that the market had expected. The disappointment ignited some serious US dollar selling across the board. What was striking by the end of play however was just how poorly the
Macro Morning: Stocks erupt
It seems Goldilocks is in the house again with the reinforcement of lower rates and the better than expected data in both Europe and the US driving stocks and the US dollar higher overnight. We’ve seen a reaffirmation of low rates for the long term from the three big central banks (Fed, BoE and ECB) at a time when the
Macro Morning: Australian dollar sales south
Stocks in the US didn’t rally last night but you would have to ask yourself why not given the Goldilocks nature of the releases. GDP data was stronger than expected coming in at 1.7% (annualised, not really strong but better than expected) with a GDP deflator of just 0.7% against expectations of 1.0% down from 1.3%
Macro Morning: Australian dollar down
Glenn Steven’s Anika Foundation speech lived up to expectations I had for it yesterday. Over many years now Governor Stevens has used this speech to look at the structure and outlook for the economy and it has become his best speech for the year. Yesterday did not disappoint with the Governor making it clear that
Macro Morning – Markets worried about the Taper
Nothing terribly exciting overnight but the price action across the board clearly reflects a bit of near term concern about the potential that the Fed will signal its intention to taper at the FOMC meeting this week. Accordingly, it seems that there was a bit of a risk-off move (as over used as that phrase
Macro Morning: Hilsenrath moment
The Fed must be pleased, the Oracle they have spawned is doing his darnedest to get the message across but in the meantime is causing materially increased volatility in FX markets at least but also in stocks and bonds. I’m using pleased in this context as a pejorative because while it has been important for
Macro Morning: Gold surge
Rightyo, so yesterday was an interesting day. A day where the Japanese push toward monetary accommodation and a weaker yen was reinforced by the G20 and the Upper House Japanese election but the yen gained. I’m not actually sure it had anything to do with the yen. It looks more like a US dollar move
Macro Morning: Higher and higher
The focus has rightly been on Ben Bernanke this past two days and the Fed Chairman faced the Senate overnight for the second day of quizzing and questioning. As with the previous session in front of the House Bernanke gave soothing sounds about the difference between tapering and tightening rates and made it clear the
Macro Morning: Waiting for Bernanke
Not much matters in the next 24 hours other than the words Fed Chairman Bernanke utters tonight up on Capitol Hill. There is plenty of room for clarification of last week’s clarification of the difference between a taper and an interest rate rise. There is plenty of room for obfuscation if lawmakers press him too hard